3 Questions: David Singer on China and the renminbi
The International Monetary Fund (IMF) made headline news this week by designating China’s currency, the renminbi, one of five “special drawing right” currencies, which may increase its use globally. Since China’s currency policy has often been a source of international political tension, we asked David Singer, associate professor of political science at MIT and a leading expert on currency politics, to explain the implications of China’s new currency status. Q. What is the significance of the IMF’s announcement? A. The IMF announced that the renminbi will be included in the basket of currencies that make up the “special drawing right” (SDR), a reserve asset created by the IMF in 1969. This decision has both symbolic and practical significance. Symbolically, the IMF has raised the status of the renminbi by placing it in the same category as the dollar, euro, yen, and pound, which together have made up the SDR basket since it...